Tags: fox news | stock | downgrade | earnings | viewership

Fox News Stock Downgraded as Viewership Plummets

By    |   Monday, 10 July 2023 10:50 AM EDT

A major financial services company downgraded Fox Corporation stock, citing risks concerning news, earnings, and viewership.

Wells Fargo analysts downgraded shares of Fox Corporation (NASDAQ:FOXA) to underweight from equal weight on Monday, lowering the price target to $31 from $35 per share.

"Fox News is the FOXA cash cow at ~80% of our FY24E EBITDA," the analysts said, Investing.com reported. "Viewership is down -19% Jan-June'23 vs Jan-June'21 due to cord cutting and/or programming.

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"More worryingly, Fox News was 52% of cable news prime-time viewership for 2020-22, 51% in Jan'23, and that has slid to a low of 38% in June'23 post-TC. FN's share of conservative news viewers has fallen from 94% to 84%."

Fox News saw a significant ratings decline after its termination of its number one rated host Tucker Carlson.

The network has yet to reveal why it had removed Carlson from his prime-time perch.

Meanwhile Newsmax has seen a significant ratings rise.

Newsmax’s total day rating rose 71% as Fox News declined 15% in the same period, according to Nielsen.

In the key prime-time hours, Newsmax saw its audience grow 126% as Fox’s audience fell 21%.  

Fox has also been suffering as cord-cutting has viewers canceling cable or satellite subscriptions and choosing less-expensive streaming options.

Seeking Alpha reported that analyst Steven Cahall said he believes Fox News has an enterprise value of roughly $11 billion. He values it five times EV/EBITDA, down from a previous estimate of six times due to worries of a "structural decline" in cable news viewership from cord-cutting and demographics, as well as worries about talent departure and increased competition.

"We are also not convinced that cable news works well in streaming, so our 8% view on annual cord-cutting presents ongoing earnings risks," Cahall said, Seeking Alpha reported.

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Analysts universally are cautious on Fox Corp. It has a hold rating from Seeking Alpha, while Wall Street analysts rate it a hold.

MarketBeat reported that other equities research analysts also recently have issued research reports about Fox Corp.:

  • Bank of America on March 28 downgraded Fox shares from a buy rating to a neutral rating and decreased its target price for the stock from $42.00 to $34.00.
  • Argus on April 6 cut shares of Fox from buy to hold.
  • Barclays on April 14 decreased its price target on Fox from $36 to $35 and set an equal weight rating.
  • Rosenblatt Securities on April 19 lowered its target price on Fox from $35.00 to $33.00 and set a neutral rating on the stock.
  • Morgan Stanley on May 4 dropped its target price on Fox from $39.00 to $37.00.

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A major financial services company downgraded Fox Corporation stock, citing risks concerning news, earnings, and viewership.
fox news, stock, downgrade, earnings, viewership
Monday, 10 July 2023 10:50 AM
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